2010 (12) TMI 955

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....ances of the case, the ITAT was justified in deleting the addition of Rs.12,16,090/- by treating the Agro based subsidy received by the assessee as tax free capital receipt, ignoring direct decisions of the Hon'ble Apex Court iin the case of Sawhni Steel and Press Work Ltd. vs. CIT 228 ITR 253 (SC) and CIT vs. Raja Ram Maize Products (2001) 251 ITR 427 (SC) as also CIT vs. Abhishek Industries Ltd. 286 ITR 1 (PandH)?   I.T.A. No.679 of 2010   ii) Whether on the facts, and circumstances of the case, the ITAT was justified in deleting the addition of Rs.7,16,511/- on account of excess payment made to sister concern on account of purchases within the meaning of provisions of sec.40A(2) of the IT Act?"   2. The assessee i....

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....e of the subsidy and even the form thereof are immaterial; that the main eligibility condition is that the incentive must be utilized; that if the object of the subsidy was to enable the assessee to set up a new unit, the subsidy was capital in nature.   8. "Ponni Sugars and Chemicals (supra), therefore, aids the assessee rather than the department. Admittedly, the subsidy granted to the present assessee has been granted for setting up of agro based industrial unit in a backward area in the state of Haryana. This fact situation is squarely covered by "Ponni Sugars and Chemicals" (supra).   9. Apropos "Sahni Steel and Press Work Ltd. vs. CIT" (supra) and "CIT vs. Raja Ram Maize Products" (supra), these decisions also do not t....